Is 100 a good enter point for TLT ?

Discussion in 'Stocks' started by xappppp, Jul 10, 2022.

  1. The lowest value was around 80, so it's very unrealistic that it falls below that.
    Just watch the 5+ years chart...
    At 80 your loss would be $17.65, that is about 18%.

    It seems you want to preserve your wealth, ie. protect it against inflation etc.
    If you tell more about your objective, then people here can show you better alternatives with more profit and less risk.
     
    Last edited: Jul 10, 2022
    #11     Jul 10, 2022
  2. xappppp

    xappppp

    I and my wife have a chase mutual checking account which we constantly have about 100k as emergency fund and want it to stay with chase, the deposit saving rate with chase is currently .01%, and any purchase of CD need to make a phone call which is a great hassle. My goal is to archieve some return like 1-3%, but really limiting the downside risk. I don't mind to constantly monitor and adjust my position but don't want to see the account suddenly swing by -12% which will give my wife an heart attack.
     
    #12     Jul 10, 2022
  3. Then you better go safe and trade spreads, like Bull Put Spread.
    Here's more info: https://www.investopedia.com/terms/b/bullputspread.asp
    The risk is predetermined, so no surprise is possible.
     
    Last edited: Jul 10, 2022
    #13     Jul 10, 2022
  4. BKR88

    BKR88

    You're currently paying $1,350 per year to keep that 100K with Chase.
    CIT Bank has a "Savings Connect" account that allows transfers to a CIT "eChecking" account.
    Put 99K in the savings @ 1.35% and 1K in the eChecking. Transfer if/when needed for an emergency. ***This if for eChecking only though so no paper checks. Might not work for your situation. Many payments though are online now so should work for most bills.
    I recently moved my emergency funds to CIT out of Wells Fargo for the same reason.

    Also, there are several online-only banks that currently pay 1.5-1.8% in a savings account. Connect the account to Chase for free ACH transfers. This transfer takes about 3 days though.

    ***Everything can be done online without phone calls.

    CIT.png
     
    #14     Jul 10, 2022
  5. gobar

    gobar

    Look at the weekly chart of tlt head and shoulder pattern
    I think it's heading to 135 and if it fails you will see $100 in no time. Right now buy tlt toll 135.
     
    #15     Jul 10, 2022
  6. You could place your money now in TBF and wait until the US Fed has finished increasing the interest rate. By that time you could consider to move out of TBF and into TLT.
    TBF is the inverse of TLT; this is the weekly chart:
    tbftlt.png
     
    #16     Jul 11, 2022
  7. What about the following trade? It's based on market data on last Friday 30 minutes before market close:

    Covered Put (aka Cash-Secured Put):
    ticker=BBBY ExpDate=2024-01-19 (DTE=560 days) Stock=5.09 Strike=8.00 Premium=5.26 (IV=129)
    If stockprice stays the same at expiration then PL=+85% (up to max +192% possible if at expiration stock is higher).
    This means annualized PL=+50% if stock stays at same level at expiration (up to max +101% if stock is higher).
    Break/Even at spot=2.70 (that's -47% off from current spot).

    Here's the P/L diagram:
    https://optioncreator.com/studbhh

    One can additionally buy a Long Put (for example Strike=1.00) to make it a Bull Put Spread. By this, the risk gets (further) reduced.

    The following data is "as of now" (ie. pre-market data on today Monday):

    BBBY_Put_2024-01-19_as_of_2022-07-11-Mo-BM.png

    And that's the underlying stock data & chart:

    BBBY_stock.png
     
    Last edited: Jul 11, 2022
    #17     Jul 11, 2022
  8. Formulas used in above example:
    Code:
    With Covered Put (aka Cash-Secured Put) the basis for PL calculation is of course this formula:
      CostBasis = Strike - Premium
    In the above example it's 8.00 - 5.26 = 2.74
    
    PL at same spot (5.09) at expiration is (see optioncreator page) $2.35
    
    PLpct = PL   / CostBasis * 100
          = 2.35 / 2.74      * 100
          = 85.76 %
    
    And the formula for annualized PLpct is:
      PLpctAnn = 100 * pow(1 + PLpct / 100, 365 / DTE) - 100
               = 100 * pow(1 + 85.76 / 100, 365 / 560) - 100
               = 49.72 %
    
    Above it was calculated as 50%. This is due to rounding effects by human calculator.
    
     
    Last edited: Jul 11, 2022
    #18     Jul 11, 2022
  9. Bobby T

    Bobby T

    $100 is certainly a good price. I've been selling laddered puts across the board at the $90, 95, and 100 strikes.

    This is all a play on rates. At $100, the 30 year Treasury yields ~4%. Around $85 the yield hits 5%. We will enter recession before yields hit 5%, in which case long duration Treasuries will be one of the best assets to own.
     
    #19     Jul 11, 2022
    xappppp likes this.
  10. xappppp

    xappppp

    This is the insight I'm looking for, but how do you know TLT = 100 is equivalent to 4% yield?
     
    #20     Jul 11, 2022